The cost of car, purchased 2 years ago, depreciates at the rate of 20% every year. If its present worth is ₹ 315600, find its purchase price.
₹ 493,125
Here, V = present value = ₹ 315,600, n = 2 years, r = 20%,
Let, V0 = Purchase price
Using V=V0(1−r100)n,
315,600=V0(1−20100)2or, 315,600=V0(80100)2=V0(1625)or, V0=315,600×2516=₹493,125